Calculating Your Premium Tax Credit
One way the Affordable Care Act aims to increase affordability is through “subsidies” or “premium tax credits,” which is money that the Federal government will pay the insurance provider for your premium. Subsidies are based on your income — the lower your income, the more money the Federal government will contribute towards your insurance premium. Calculating your “income” is a bit tricky, because it’s based on your Modified Adjusted Gross Income (MAGI). Here’s what’s included in your income calculation.